An analysis of the new excise duties and the record demand for diesel: all the structural factors that have established the definitive overtaking of petrol.
For those who drive a diesel car, refueling has now become a shocking experience: in many Italian stations the diesel in self mode tap 1.95–2.00 euros per litrewhile the gas it is around 1.75–1.80 euros per litre. A reversal compared to the “golden era” of diesel, which for years was the cheapest fuel.
To understand why diesel costs more than petrol we need to start from a simple fact: the tax advantage of diesel has been cancelled. For decades the state has applied to diesel fuel lower excise taxes compared to petrol, with the justification of supporting freight transport and a significant part of the productive economy. Excise duties are specific taxes per unit of product, i.e. a fixed tax for each liter of fuel. Before the reform, the excise duty on diesel was around 0.617–0.632 euros/litre, compared to around 0.713–0.728 euros/litre for petrol: a differential classified as “environmentally harmful subsidy”i.e. a tax break considered to be in conflict with climate objectives.
Goodbye diesel savings: because diesel costs more than petrol, almost 2 euros
The turning point came with the latest budget maneuvers and the related implementing decrees: the government decided to realign the tax rates of petrol and diesel. In other words, excise duties on diesel are gradually increased, while those on petrol are slightly reduced, until the two fuels are at the same level. Consumer Federation (consumer protection association) and specialized economic newspapers have explained the process in detail: a few cents more excise duty on diesel fuel every year, a few cents less on petrol, with the aim of eliminating diesel’s historical advantage by the mid-2020s. A strategy that is also interpreted from an environmental perspective: removing the “discount” from the fuel most used in heavy transport means, in the intentions of the legislator, discouraging its use in favor of less polluting solutions. Then there is another element that is often underestimated: theVATthe value added tax which also applies to fuel. The rate is proportional, but is calculated on a price that already includes excise duties and industrial margins. When excise duties on diesel rise, the effect is therefore amplified by VAT, causing the final price at the pump to rise more than the change in the fixed tax alone would suggest.
But if the weight of taxes on the two types of fuel is the same and diesel is more expensive at the pump, does this mean that producing diesel is more expensive? In reality this is not the case. Second PricePediawhich has been monitoring international fuel prices for years, the refining process does not make diesel fuel intrinsically more expensive than petrol. Indeed, from a purely industrial point of view, under normal conditions the production costs of the two fuels are very close, and in certain contexts diesel can even be slightly less expensive, because on average it requires fewer transformation processes than petrol. Also the elaborations of FIGISC–ANISA (the federation of fuel managers adhering to Confcommercio) on European industrial prices – i.e. prices before taxes – show limited differences between petrol and diesel, in the order of a few cents per litre. This means that it is not the technical complexity of production that explains the overtaking of diesel at the pump. The crux lies elsewhere: in the relationship between supply, demand and taxes.
A market unbalanced by record demand for diesel
The real point is that Italy – and Europe more generally – consume much more diesel than petrol. According to data fromUnion of energies for mobility (Unemthe association representing the main companies in the sector), in 2024 Italian consumption was around 24 million tonnes of diesel compared to around 8.6 million of petrol: almost three times as much. The reasons are known: for years the tax advantage, lower consumption and greater autonomy have pushed millions of motorists towards diesel. Added to this is the structural role of diesel in freight transport, logistics, public transport and in part of civil and industrial heating. Petrol, on the contrary, is now almost exclusively a fuel for small and medium-sized private cars. When a product is so central to the real economy, any jolt to supplies or inventories translates into more pressure on prices. We have seen this several times in recent years: analyzes published in specialist newspapers in the automotive and energy sectors – such as Four wheels and various economic information portals – have documented how, given the same increase in the price of oil, diesel prices often react more abruptly than petrol prices.
In practice, the diesel market is more “tight”: strong and constant demand, limited room for maneuver in production and logistics, greater exposure to seasonal peaks (for example in winter, when the need for heating also increases). In such a context, if we add fiscal realignment, the result is almost obvious: the price of diesel tends to be above that of petrol.
Geopolitical tensions and new rules of the game on spirits
The last piece is the international scenario. The tensions in Middle East and in other key areas for oil extraction and export they pushed the barrel back towards 100 dollars, making all crude oil derivatives more expensive. But, once again, it is diesel that pays the heaviest bill. In recent months i middle distillates – the family of products that includes diesel and jet fuel – have been particularly affected by the combination of reduced inventories, growth in global demand and logistical difficulties in some trade routes. This has translated into greater volatility in the industrial price of diesel compared to petrol. In Italy, where diesel has just lost its historic tax discount, the shock is felt immediately at the pump. The picture that emerges is that of a new balance: petrol and diesel aligned on the tax front, but diesel more exposed to the turbulence of global demand and geopolitics.
For motorists, the message is clear: those who opted for diesel just to save money at the pump today find themselves with very different bills from those of a few years ago. The advantage in terms of consumption remains – a diesel car, of the same model, generally consumes less than a petrol car unless you choose a hybrid car – but it is eroded by a structurally higher price per litre. For freight transport and professional fleets the issue is even more delicate. A more expensive diesel means higher costs for the logisticswhich are often downloaded along the supply chain until the final prices of the goods are reached. It is no coincidence that trade associations and operators in the sector have repeatedly asked the government for targeted interventions, for example compensation mechanisms or tax credits linked to the professional use of diesel.
In the medium term, various study centers see this new price framework as a potential accelerator of the transition: corporate and public transport fleets could anticipate the renewal of vehicles by focusing on electric vehiclesplug-in hybrids or solutions powered by advanced biofuels. In short, the price of diesel is no longer just an indicator of the cost of filling up, but also a tool with which economic and environmental policy seeks to guide the choices of businesses and citizens.
